Monthly Archives: January 2015

A ceremony at Madison Square Garden yesterday morning marked the graduation of 884 new officers into the New York Police Department. When Mayor Bill de Blasio took the podium to address the graduating class, praising them for their courage and determination, he was greeted like an unpopular high school principal: with boos, jeers, and the turning of backs. When he talked about the officers facing “problems [they] don’t create,” someone in the audience called back: “You created them!”

Don’t blame any incoming officers for the outbreak, however—they were only mimicking the hysterical fits their elders have been throwing in public for the past month. Two days earlier, at the funeral of officer Rafael Ramos, uniformed members of the force turned around en masse when de Blasio began to deliver his eulogy. (What other group comes to mind when you think about protests at funerals?)

After Officer Ramos’s funeral, I asked a group of cops who had gathered in one of the neighborhood bars why they aimed their anger so exclusively at Mayor de Blasio. Didn’t the blacks and the protesters merit at least a portion of their contempt? No, they said, I didn’t understand, the protesters didn’t count. They were just “followers,” “rabble-rousers,” “anarchists,” “know-nothing kids looking to make a scene.” When I suggested that this surely wasn’t true of every one of the 30,000 demonstrators on December 13, one of the officers shot back, “It was de Blasio’s fault that all those people showed up. He told them it was okay to spit in our faces. They knew we had been given orders to let them run wild.”

A diminutive, white-haired sergeant climbed onto the top of his stool, silenced the bar, and in a booming voice delivered a rhyming toast that ended with the verse, “De Blasio is nothing but a whore’s court jester, sucking the cock of every protester.” The cops in the bar roared, and three or four officers followed with de Blasio–hating toasts of their own. Drinks flowed. A retired detective from Yonkers reminisced in great detail about the various suspects—or “mutts”—he’d clobbered and left for dead. When he saw me listening and obviously suspected I wasn’t “one of us,” he said, with an unconvincing smile, “None of those stories are true, understand?”

And I hadn’t seen the quote that NYPD was so angry about. Here it is, from the NYbooks piece:

It was hard to reconcile this enmity with what some officers claimed had offended them most: de Blasio’s recounting of conversations about the police that he and his wife have had with their son Dante, who is black. “Don’t move suddenly, don’t reach for your cell phone,” he told his son. On the television show This Week with George Stephanopoulos, he explained, “There’s that fear that there could be that one moment of misunderstanding with a young man of color and that young man may never come back…. It’s different for a white child. That’s just the reality in this country.”

The observation has become a cliché, a truth based on experience that almost no reasonable person disputes. A huge number of African-American men live daily in a state of high alert, if not outright fear of the police, and have been doing so for decades.

Wow. How can anyone argue with that? Honestly, I tell my white kids the same thing.

Perfect! Last week, the Swiss National Bank in reaction to market pressure, ended its crawling peg against the euro. The Swiss Franc surged 40% versus the euro, before settling around 20% higher, and roughly 17% against the already strong dollar. So, guess what? Attendees at The World Economic Forum – an annual gaggle of the global financial elite held in Davos, Switzerland, which starts today – just saw their trip get a lot more expensive.

Ha! That’s karma at work.

They also explained what the meeting is:

Most people who attend (or who aspire to attend) just call the meeting “Davos.” It’s been described as a meeting of the 1% – wealthy business CEO’s, high-ranking government officials, heads of international organizations, and, occasionally a famous economist, artist, professor, or author. And, don’t forget the press – they are everywhere.

For the most part, the meeting is made up of people who believe the “elite,” in business and government – the ones often called the “smartest people in the room” – can “fix” just about any problem that exists in the economy or society.

Last year’s theme was “Resilient Dynamism.” No joking; to the people at Davos that actually means something, or at least they all pretend that it does. This year, it’s “The Reshaping of the World: Consequences for Society, Politics and Business.” Some attendees actually think a central authority can Reshape the World and still have Resilient Dynamism.

Much of the Analysis of China’s 2014 GDP Data on Economic Slowdown But From a Very Big Base

Post Categories: China

The Economist | Wednesday, January 21, 2015, 21:27 Beijing

MUCH of the analysis of China’s 2014 GDP data, which the government published today, has focused on the economy’s slowdown.

That is, on one level, understandable. Growth of 7.4% was China’s weakest in 24 years (see chart below). It was also the first time this century that China has missed its official growth target, falling just short of the official goal of 7.5%.

But on another level, the focus on the slowdown seems almost myopic. China joined an exclusive club last year: its economic output exceeded $10 trillion, making it only the second country to achieve that feat (America reached this level in 2000).

At market exchange rates, China’s economic output was $10.3 trillion last year, more than five-times bigger than a mere decade ago, when it was $1.9 trillion.

Moreover, the increase in China’s economic size means that slower growth now generates as much additional demand as its turbo-charged growth did just a short time ago. Last year’s growth, even with subdued inflation, yielded an extra 4.8 trillion yuan in GDP, almost exactly the same as in 2007, when growth ran to 14.2% and inflation was far higher.

And because the economy today includes more labour-intensive services than in the past, China is doing even better at creating new jobs: it added 13.2 million urban jobs last year, compared with 12 million in 2007.

This would all be beside the point if China’s growth was simply the prelude to a spectacular collapse. But looking beyond the headline GDP figure, China’s growth also appears to be slowly becoming better balanced.

The big concern since 2009 when China unleashed a mammoth stimulus programme has been the economy’s excessive reliance on investment and its sluggish consumption spending. Gross fixed capital formation accounted for 48.3% of China’s growth in 2011, well above the peaks of roughly 40% hit by South Korea and Taiwan when they industrialised last century.

We will have to wait for a breakdown of GDP by expenditure to get the 2014 figures for China, but the data from today’s release point in the right direction.

First, even with last year’s ‘mini-stimulus’ to prop up growth, investment is, little by little, playing a diminished role in China’s economy. Consumption drove 51.2% of growth last year, up 3 percentage points from a year earlier.

With the contribution from trade also positive for growth, China’s investment-to-GDP ratio is likely to have declined. This can also be seen from the rising share of services in GDP. Services, which are more closely correlated with consumption than with investment, grew to account for 48.2% of the economy last year, up 1.3 percentage points from 2013.

Second, healthy wage growth means that labour’s share of China’s economic output rose last year, another critical part of tilting the country towards greater consumption. After controlling for inflation, incomes increased 8% last year, three-fifths of a percentage point faster than the economy as a whole.

Importantly, this income growth probably also resulted in a mild improvement in income equality within China because it was rural citizens, poorer than their urban counterparts, who did particularly well. Rural incomes increased 9.2% last year on average, while urban incomes rose 6.8%. The gap between urban and rural incomes peaked at a ratio of 3.3-to-1 in 2009; it fell to about 2.9 last year.

Anytime there is good news to be gleaned from Chinese statistics, it is customary to ask whether the government’s numbers can be trusted. This is a fair question given evidence in the past that officials, especially those at the local level, have manipulated data to flatter their performance.

It is well known that even Li Keqiang, now China’s prime minister, cast doubt on the reliability of local numbers when he was the Communist Party chief of Liaoning province.

A divergence between resilient economic growth and the much slower increase in electricity output over the past year has fuelled suspicions that the government is again playing games, since electricity used to be a close proxy for the economy as a whole.

But that is an outdated way of looking at the Chinese economy: as the services sector grows more quickly and heavy industry weakens, slower electricity output is to be expected.

A 2013 survey of Chinese statistics by Carsten Holz of the Hong Kong University of Science and Technology found no proof of falsification. That said, he also noted that a lack of transparency made it impossible to double-check final data.

In this respect it is encouraging that China missed its 2014 growth target. The message from the top of the government is that growth is not as big a priority as in the past.

It is a message reinforced by the constant repetition of President Xi Jinping’s favourite slogan for describing the economy, the ‘new normal’. That phrase, intended to describe slower but higher-quality growth, was trotted out no fewer than eight times by the statistics bureau during today’s GDP news conference.

The Chinese government’s tolerance for the slowdown will be tested in coming months as property investment, the biggest single driver of the economy in recent years, is likely to weaken yet further. The International Monetary Fund has cut its forecast for China’s 2015 growth to 6.8%.

That would be its weakest performance in 25 years. But when headlines appear about the 25-year low, as they inevitably will, it is worth remembering that the Chinese economy is more than 25-times bigger than it was in 1990.

More Elon Musk, building a SolarCity plant in Buffalo, with the capacity of building solar panels to generate 1000 megawatts of electricity each year. I will keep track of this one. From Buffalo News:

RiverBend by the numbers

1 million: Factory size in square feet

12: Cabela’s stores could fit inside

900: 70-foot pilings driven into bedrock so far

5,500: Pilings that will be used to support the foundation

70: Construction workers currently working at the site

1,600: Workers expected during peak construction

$750 million: State’s commitment to build and equip the factory

2,900: Jobs SolarCity promises to create at the factory and its suppliers

Timeline: February 2015: Erection of structural steel begins.

Oct. 2015-March 2016: Period when building is to be completed.

Jan. 2016-June 2016: SolarCity to install equipment for three months after building is completed.

March 2016-Dec. 2016: Full production in three to six months of operation.

News on recycling of sewage sludge. There is also progress at moving this upstream to the sanitation plants, so that the water coming out of them is clean. Really clean – free of not just solids, but chemicals. It’s a basic of manufacturing – if you are paying to get rid of a waste product, figure out a way to reuse it or sell it.

In a new study, scientists at Arizona State University (ASU), Tempe, quantified the different metals in sewage sludge and estimated what it all might be worth. They took sludge samples gathered from around the country and measured the metal content using a mass spectrometer that can discern different elements as they are ionized in a superhot plasma. The upshot: There’s as much as $13 million worth of metals in the sludge produced every year by a million-person city, including $2.6 million in gold and silver, they report online this week in Environmental Science & Technology.

Metals aren’t the only things with potential value. A small number of sewage plants are removing phosphorous and nitrogen, which can be sold as fertilizer. A Swedish treatment plant is testing the feasibility of making bioplastics from wastewater. A model sewage incinerator that generates electricity and drinking water was just promoted by the Bill & Melinda Gates Foundation, which helped fund its construction.

And, one more, from Noah Smith, on how electric cars might help us lose interest in the middle east while also helping to phase out the need for fossil fuels as energy altogether:

A 2011 McKinsey & Co. analysis reported that battery prices would have to drop by about three-quarters to make electric cars cost-competitive at gas prices of $2.50 per gallon. But that was four years ago, and battery prices have continued falling. We could see cost-competitive electric cars taking over the road in as little as a decade. That’s how fast the cost trend is moving.

…

…ground transportation still makes up the bulk of our oil use. So when batteries advance to the point where oil is no longer used for cars and trucks, the Saudis, Russians and Iranians will find themselves selling what is suddenly a niche product. And simultaneously, the U.S., Japan, Europe and other energy importers will find themselves free from the yo-yo of global oil prices.

In other words, it’s less than two decades until we are free from the yoke of the petrostates and their nasty, backward regimes.

Attorney General Eric H. Holder Jr. on Friday barred local and state police from using federal law to seize cash, cars and other property without warrants or criminal charges.

Holder’s action represents the most sweeping check on police power to confiscate personal property since the seizures began three decades ago as part of the war on drugs.

Since 2008, thousands of local and state police agencies have made more than 55,000 seizures of cash and property worth $3 billion under a civil asset forfeiture program at the Justice Department called Equitable Sharing.

…

A Justice Department official, who spoke on the condition of anonymity to discuss the attorney general’s motivation, said Holder “also believes that the new policy will eliminate any possibility that the adoption process might unintentionally incentivize unnecessary stops and seizures.”

…

News of the policy change surprised advocates who have for a long time unsuccessfully sought to reverse civil asset forfeiture laws, arguing that they undermine core American values, such as property rights and due process.

“It’s high time we put an end to this damaging practice,” said David Harris, a constitutional law scholar at the University of Pittsburgh. “It has been a civil-liberties debacle and a stain on American criminal justice.”

Holder’s action comes as members of both parties in Congress are working together to craft legislation to overhaul civil asset forfeiture. On Jan. 9, Sens. Charles E. Grassley (R-Iowa) and Mike Lee (R-Utah), and Reps. F. James Sensenbrenner Jr. (R-Wis.) and John Conyers Jr. (D-Mich.) signed a letter calling on Holder to end Equitable Sharing.

Grassley praised Holder’s decision on Friday. “We’re going to have a fairer justice system because of it,” Grassley said. “The rule of law ought to protect innocent people, and civil asset forfeiture hurt a lot of people.”

He said he planned to continue pressing for legislative reforms.

“I commend the department for this step and look forward to working with them on comprehensive forfeiture reform that protects Americans’ property rights,” Sensenbrenner said. “Equitable Sharing has become a tool too often used to bypass state law. ”

…

Civil asset forfeiture is one of the most powerful — and unusual — law enforcement tools. Police do not need to prove a crime to use it, because it is a civil action against an object, such as currency or a car, rather than a person.

As a consequence, protections common in criminal law do not apply. In fact, owners who want to recover their cash or property generally must show it is theirs and demonstrate it is not tied to crime.

Forfeiture has its basis in British admiralty law, but it became a part of the fight against drugs in the United States beginning in 1970, when Congress allowed police to seize aircraft, boats and other property used to transport narcotics or bought by drug lords with ill-gotten gains.

In the 1980s, the law was expanded to include cash. About the same time, the Justice Department created its Asset Forfeiture Program and began allowing federal agencies to adopt seizures made by state and local authorities. Those changes led to a massive increase in money deposited into the federal forfeitures fund as seizures by local and state police surged. Allegations of police ­abuses also increased.

Searing reports by the Orlando Sentinel and other newspapers about abuses spurred Congress to pass the Civil Asset Forfeiture Reform Act in 2000. But a key change — ending the sharing of seizure proceeds between local police and federal agencies — was cut from the bill after fierce opposition from police and prosecutors. Some lawmakers called the sharing of money a “perverse incentive” for overly aggressive police tactics.

After Sept. 11, 2001, the use of the asset forfeiture law and the Equitable Sharing Program rose to new heights as federal authorities called on local, county and state police to help keep watch on the nation’s highways, not only for drug smugglers but also for terrorists.

The Departments of Justice and Homeland Security paid private firms millions to train local and state officers in the techniques of an aggressive brand of policing known as “highway interdiction.” That training, developed by the firms, included methods for ferreting out suspicious drivers and coaxing them into granting warrantless searches of vehicles, according to internal company training documents obtained by The Post. The files emphasized the importance of targeting cash.

…

Holder said seizure adoptions will continue to be employed by local and federal authorities, but only in limited circumstances when public safety is at risk and where local and federal authorities are collaborating in cases clearly involving criminal activity.

Keystone XL is the definition of shovel-ready infrastructure project. Almost overnight, Keystone XL could put 9,000 hard-working American men and women directly to work. The U.S. State Department’s Final Supplemental Environmental Impact Statement (PDF, 4 MB) found that the project would support more than 42,000 direct and indirect jobs nationwide. – See more at: http://keystone-xl.com/about/jobs-and-economic-benefits/#sthash.dP31k85H.dpuf

Or looking at it another way, from the same report:

Over at CBS’s “Face the Nation,” Sen. Charles E. Schumer (D-N.Y.) said it “would create several thousand temporary construction jobs and only 35 permanent jobs.”

The effect on the carbon emissions appears to be harder to determine, but certainly TransCanada is lowballing it. Which makes me think it might be important, and bad:

Again, from the Keystone XL website, “the estimated incremental greenhouse gas emissions associated with the products carried by Keystone XL are expected to be substantially less than 18.7 million tonnes per year.”

The pipeline would be responsible for generating a whole lot more emissions than the State Department accounted for, the group argues, because it would be facilitating more rapid development of the tar sands, which would create its own emissions in turn. The report finds that, through 2050, “KXL-enabled production” of tar sands oil would produce as much as 5.3 billion metric tons of carbon dioxide-equivalent. Carbon Tracker’s projection is within the range of the State Department’s estimate of annual emissions — a maximum of 168 million metric tons — but it totals them over 35 years to demonstrate the pipeline’s cumulative and longterm impact. It would be the equivalent of building an additional 46 coal-fired power plants, or roughly the average amount of CO2 that the United States emits overall each year.

The effect on freedom is definitely bad. The use of eminent domain to benefit a private company is outrageous. And a foreign private company at that! From Forbes:

In an email after the publication of this article, TransCanada said it has reached voluntary agreements to secure 100% of the private easements required for the pipeline in Montana and South Dakota. It has 76% of the easements required for the route in Nebraska, it said. In general, the company said it has had to use eminent domain with only 2% of landowners.

The Native American nations are also being railroaded. It’s shameful. 16 tribes in 3 states object to the pipeline going through or near their lands.

“Midwest drivers would be hardest hit because the region currently imports more than half of its oil for refining from Canada,” according to Consumer Watchdog, a nonprofit public interest group. “Increases at the pump could range from 25 cents to 40 cents a gallon, depending on how regional refineries respond to paying $20 to $30 more per 42-gallon barrel for Canadian crude oil.”

A 2011 report by Cornell University’s Global Labor Institute projected that the Keystone’s rerouting of oil from the Midwest would end up costing the region up to $4 billion in higher gas prices…

On Saturday morning, a pipeline in Montana spilled up to 50,000 gallons of crude oil into the Yellowstone River, the pipeline’s operator confirmed Sunday night.

Here’s a photo from the Billings Gazzette. Those dark spots are the oil under the ice:

This also happened back in 2011, on July 1. I was there in late September that year, and boats were still not permitted anywhere near the spill site. That was 63,000 gallons. KXL capacity starts at 700,000 barrels per day, increasing to 1.5 million. 63,000 gallons is 3 minutes of the starting rate.

Pipelines are mechanical. They will malfunction and leak. It’s just a matter of when, and where, and how much.